African Airlines Struggling to Profit Despite Rapid Demand Growth: Projected to Face Lowest Profit Margins in 2025

Published on December 15, 2025

African airlines are facing a tough challenge as they are projected to earn just $1.3 in net profit per passenger in 2025. This figure highlights the stark contrast between the continent’s aviation recovery and the more robust post-pandemic growth seen in other parts of the world. According to the latest International Air Transport Association (IATA) report, African airlines are expected to generate a collective profit of approximately $200 million in 2025, which equates to a net margin of barely above 1 percent. This contrasts sharply with the global airline industry, which is projected to earn $36 billion in net profits in the same year, with Middle Eastern airlines expected to see profits of up to $28.90 per passenger.

The Profitability Gap: Africa vs. the World

While global demand for air travel has surged post-pandemic, African carriers are struggling to keep up with the profitability trends seen in other regions. Middle Eastern airlines benefit from their strategic position as global connecting hubs, favorable regulatory environments, and modern fleet structures, giving them a net profit per passenger that is more than 22 times greater than what African carriers are expected to earn. European carriers are projected to make $10.60 per passenger, while North American airlines are expected to earn $9.50 per passenger. Even Latin American airlines, despite their own challenges, are expected to outperform African carriers with $7.30 per passenger.

The overall net margin for African carriers is expected to be the lowest globally, with a forecast of 1.1 percent in 2025, compared to a global average of 3.6 percent. This leaves African airlines with minimal room for financial flexibility, and little to no cushion against potential operational shocks. Meanwhile, Middle Eastern carriers are projected to achieve a 9.3 percent margin, nearly nine times higher than Africa’s aviation sector.

The Root Causes of Africa’s Aviation Crisis

The reasons behind the fragility of Africa’s aviation recovery are complex and multi-faceted. The continent’s aviation sector faces deep structural challenges that individual airlines cannot easily overcome. These issues span high operating costs, aging fleets, fragmented markets, and tax burdens that disproportionately affect African carriers compared to their global counterparts.

High Operating Costs

One of the primary barriers for African airlines is high operational costs. The unit costs for African carriers average 140 US cents per available tonne-kilometer (ATK), nearly double the global average. This cost disparity is driven by factors such as expensive jet fuel—which remains among the highest in the world—as well as airport taxes, regulatory charges, and statutory fees, which are significantly higher than in other regions. The limited competition in the fuel supply chain, coupled with high logistics costs and low purchasing leverage, further exacerbates these financial pressures.

Aging Fleets

Another major challenge for African airlines is the age of their fleets. African carriers operate aircraft that are, on average, five years older than the global norm. This growing gap leads to higher fuel consumption, more frequent and expensive maintenance, and longer periods of aircraft downtime. The difficulty in sourcing replacement parts—which are more expensive and subject to longer delivery lead times—adds to the operational burden, preventing airlines from modernizing their fleets and improving efficiency.

Fragmented Markets

Africa’s fragmented market structure makes it difficult for airlines to achieve economies of scale. The continent’s airlines often operate in smaller, isolated markets with limited traffic volumes and fewer flight frequencies. As a result, African carriers are forced to spread their fixed costs—such as aircraft ownership, crew salaries, and overhead—across a much smaller base than their competitors in more consolidated markets. This structural inefficiency keeps per-unit costs high and profitability low.

Tax Burden

Africa has the highest average corporate income tax rate in the world at 28 percent, which further erodes profitability. This tax burden leaves carriers with less capital to reinvest in fleet renewal, maintenance, or operational improvements, limiting their ability to compete globally and modernize their services.

Currency and Financing Challenges

Several African economies also face foreign exchange shortages, making it difficult for airlines to access hard currency for aircraft leasing, fuel purchases, and maintenance contracts. This situation hampers airlines’ ability to invest in critical infrastructure, digital systems, and efficiency-enhancing technologies, further deepening their structural challenges.

Demand Growth vs. Profitability

While African aviation remains among the fastest-growing sectors globally, demand for air travel in Africa is increasing at a rate of 6 percent annually, outpacing global averages. This growth is driven by rising middle-class populations, better visa accessibility, and expanding intra-African business travel. Over the next 20 years, the continent’s aviation market is expected to grow at 4.1 percent annually, eventually reaching 411 million passengers.

However, despite this growth in passenger numbers, profitability is not following the same upward trajectory. African airlines lack the pricing power to capitalize on this growth. Low GDP per capita across much of the continent means that air travel remains highly price-sensitive, which constrains airlines’ ability to raise fares in response to rising costs. Additional barriers such as visa restrictions, restrictive bilateral agreements, and high passenger charges further dampen demand elasticity.

The Investment and Modernization Challenge

The profitability crisis facing African airlines threatens the continent’s aviation future. With margins of just 1 percent, African carriers have limited resources to invest in new aircraft, digital infrastructure, or sustainability measures that are reshaping global aviation. This puts them at a significant disadvantage as the global aviation industry increasingly moves toward newer, more fuel-efficient aircraft and advanced systems designed to reduce emissions and improve productivity.

Urgent Policy Solutions

Industry leaders and policymakers have identified several potential remedies to improve the situation, though implementation remains uneven across the continent.

1. Reducing Cost Burdens:
   IATA and regional aviation bodies are urging African governments to rationalize taxes and charges on airlines and passengers. Reducing airport fees and streamlining regulatory processes could help lower operating costs and improve margins without requiring carriers to cut services.
2. Market Liberalization:
   The Single African Air Transport Market (SAATM), an initiative of the African Union, could be the key to unlocking new routes and increasing competition. If key African countries fully opened their markets, this could create an additional 155,000 jobs and $1.3 billion in annual GDP, enabling airlines to achieve greater scale.
3. Consolidation and Strategic Partnerships:
   African carriers need stronger corporate governance and strategic partnerships to build resilient, commercially viable networks. Consolidation within the sector could help create larger, more competitive players that can compete on the global stage.
4. Infrastructure Investment:
   Improvements to airport infrastructure, air traffic control systems, and ground handling services would reduce operational delays, fuel waste, and maintenance issues, helping to lower unit costs and improve operational efficiency.

Conclusion: The Path Forward for African Aviation

Despite significant challenges, African aviation has enormous potential, with traffic growing faster than in many other regions and demand increasing across key markets. However, to fully capitalize on this growth, the continent must address the structural barriers that are preventing airlines from becoming financially viable. Without decisive action to reduce costs, liberalize markets, invest in infrastructure, and encourage strategic partnerships, African airlines will continue to face profitability challenges and struggle to modernize and compete globally.